Here’s how parents can get student loan forgiveness.
Here’s what you need to know.
In the ongoing quest to get student loan forgiveness, parents may wonder if they too can get student loan forgiveness. The good news is yes. However, parents who have student loans will need to take several steps to get their student loans forgiven. This is what you must do.
(No, Biden didn’t promise to forgive your student loans).
How to Get Student Loan Forgiveness
Like most student loan forgiveness options, parents with federal student loans may be eligible to have their student loan forgiven. Specifically, parents who have borrowed a Parent PLUS loan to have their dependent child attend college, for example, have several options for obtaining student loan forgiveness. This includes:
- forgiveness of public service debt; and
- reimbursement based on income
Civil Service Loan Cancellation: How to Cancel Parent PLUS Loans
Is there a student loan forgiveness for Parent PLUS loans?
Yes, there is student loan forgiveness for Parent PLUS loans. For example, the cancellation of utility loans is an option. (Do you qualify for $5 billion in student loan forgiveness?) Parents with Parent PLUS loans may qualify for the Public Service Loan Forgiveness Program. Under this program, student borrowers must work full-time for a qualified public service or non-profit employer. With the cancellation of civil service loans, it’s not your role that matters. Rather, it is your employer. Working for the federal government may qualify. However, working at a consulting firm where you work with the federal government would not count. (Biden stopped challenging student loan forgiveness after public outcry).
How to register
You’ll want to enroll in an income-driven repayment plan. These plans set your monthly payment based on your discretionary income and family size. There are four main income-based reimbursement plans, including Income-Based Reimbursement (IBR), Pay-As-You-Go (PAYE), Revised Pay-As-You-Go (REPAYE), and Income-Based Reimbursement (ICR). ). For Parent PLUS loans, only ICR is available for student loan cancellation. Contact your student loan officer for details. It is important to note that only federal student loans are eligible for income-contingent repayment. Each year, you will need to recertify your income and family size. Your monthly student loan payment will be equal to 20% of your Discretionary Income. Also be sure to submit a Attestation of employment form to the US Department of Education each year and each time you change employers.
How much student loan forgiveness can you get?
- Abandonment of public service loan: With Public Service Loan Forgiveness, you can get full student loan forgiveness on your remaining student loan balance after making 120 monthly student loan payments on time and in full.
- Income-Based Reimbursement: With income-contingent repayment, you can get full student loan forgiveness on your remaining student loan balance after 20 years (undergraduate student loans) or 25 years (graduate student loans) of student loan repayments.
Don’t Forget to Consolidate Parent PLUS Loans
To qualify for the Civil Service Loan Relief, you will need to have direct loans. So, if you have a Parent PLUS loan, you must first consolidate Parent PLUS loans with the US Department of Education. This will convert your Parent PLUS Loan to a Direct Consolidation Loan. Then you can sign up for Income Contingent Reimbursement (ICR). If you have multiple children in college, you may want to wait until your youngest child has graduated so that all of your Parent PLUS loans can be included.
If you have already registered for Public Service Loan Forgiveness but previous payments have been deemed ineligible, be sure to complete the Limited Forgiveness for Student Loan Forgiveness.
Will your student loans be forgiven?
You may be wondering if Parent PLUS loans would be canceled by large-scale student loan cancellation. Actually it depends. Sen. Elizabeth Warren (D-MA) and Senate Majority Chuck Schumer (D-NY) have proposed to forgive up to $50,000 in student loans for student borrowers. While that plan has stalled in Congress, they are now hoping President Joe Biden will sign an executive order to cancel student loans for millions of student borrowers. (Biden canceled $15 billion in student loans). Some parents may qualify, some may not. (Here’s Who Won’t Get Student Loan Forgiveness). For example, any proposed student loan cancellation can only relate to direct loans. Technically, Parent PLUS loans may need to be consolidated first to qualify. Second, the Warren and Schumer proposal imposes an annual income cap of $125,000. So, if you have Parent PLUS loans and earn more than this income threshold, you would not qualify for student loan forgiveness. Currently, there is no indication that Congress or the President are planning to cancel borrowers’ student loans on a large scale. So if you’re looking for student loan relief, you’ll have better luck focusing on the civil service loan forgiveness or the income-driven repayment plan.
With temporary student loan relief ending soon, make sure you have a student loan repayment game plan. Here are some smart options for paying off student loans faster: